Carrots and Sticks Don’t Work decries motivation based around financial incentives, considering these programs brittle and temporary. Instead, author Marciano suggests that people are most motivated when they feel respected by their organization and feel respect for their work. This leads to a model called RESPECT:
The full summary contains a wealth of actionables for each of these seven components. Here are some of the most notable recommendations:
After graduating from his PhD program in Clinical Psychology, the author had a terrible experience at his first job. People didn’t care about him on his first day; no one seemed engaged at work; his bosses gave unclear expectations of what he was supposed to do. He quit.
Marciano realized that respect was the center of an engaging workplace. Whenever he felt unrespected, he always disengaged. Over several years, he found the factors forming the acronym RESPECT:
The book covers why reward programs don’t work, how the RESPECT model drives engagement, and how to implement RESPECT in your organization.
Marciano distinguishes between motivation and engagement. In his semantics, motivation refers to short-lived, brittle energy influenced by external factors. Remove the factors, and the employee stops working. Motivational energy tends to burn brightly and briefly without leading to permanent habits.
Engagement is an intrinsic, deep-rooted commitment to the job, organization, team, manager, and customer. Engaged employees work hard for the sake of the organization and because they feel fulfilled.
Much motivation literature makes use of operant conditioning, made famous by the experiments of Skinner and Pavlov. Reinforcement increases the likelihood of a behavior occurring in the future. Positive reinforcement is application of positive rewards bringing the person above neutral – like money and compliments. Negative reinforcement refers to cessation of negative stimuli, like electric shocks or complaints (e.g. a mother who picks ups a crying baby is negatively reinforced to pick up the baby more).
Punishment refers to negative consequences that decrease the likelihood of the behavior occurring again in the future. (This is often conflated with negative reinforcement).
Operant conditioning only applies when the likelihood of the behavior changes – otherwise, it doesn’t meet the criteria. Marciano argues that much of management advice uses ineffective strategies based on rewards that don’t change employee behavior.
Clearly operant conditioning works on animals and in certain simplistic behaviors like feeding your dog and manual labor. This reflects how labor evolved. Throughout much of history, labor was performed by slaves or criminals, and punishment for bad work was corporal punishment or death. During the Industrial Revolution, management science evolved to handle simplistic assembly line work that could be easily measured and boosted.
As technology improved, the nature of work changed to more complex knowledge-based work, and our understanding of psychology improved. Maslow’s hierarchy gave a new paradigm for understanding motivation, away from simple rewards to a spectrum covering base needs to self-actualization and fulfillment.
Employees have also changed their preferences. While WW2-era employees focused on working hard and not obsessing over happiness, today’s employees seek mental health, job satisfaction, and fulfillment. Money is less commonly a motivating factor – often it’s a Hygiene factor, meaning it matters when it’s missing, and matters especially when the employee feels she is unequally compensated. Workers today tend to be less consumerist, thus decreasing the impact of monetary rewards. Finally, workers no longer feel that companies are loyal to their employees, given corporate scandals, outsourcing, downsizing, and lack of benefits.
So a new type of management system is needed to engage employees.
Next, the book covers 20 reasons that traditional reward programs fail to improve employee performance. As defined here, rewards are primarily monetary and given to select top performers for meeting metrics (picture bonuses for exceeding sales quotas). They’re also commonly considered “incentives” or performance bonuses. Rewards can also be recognition programs, including recognizing employees publicly or giving awards.
In simple terms, think of rewards as carrots designed to lure people into performing the desired behavior.
1. Rewards fail because they are short-term.
Rewards programs accomplish specific goals in a short period of time. They don’t set up longer term impacts. Diets don’t lead to long term behavior until they become ingrained as healthy eating.
2. Rewards don’t work if the person doesn’t want them.
If the worker doesn’t want the carrot, the behavior won’t be reinforced. For instance, someone may get vacation days she doesn’t use, or she doesn’t want to be recognized as the Monthly Peppiest Employee. In some cases the worker may intentionally lower effort to avoid the reward.
3. Rewards are too narrowly focused.
Rewards programs often target specific narrow goals rather than broader behaviors. For instance, companies often reward making sales at the expense of teamwork, trust, and customer satisfaction.
(Shortform note: recall how Wells Fargo paid narrowly-focused bonuses for creating new accounts, leading employees to defraud bank customers. Had they focused rewards on larger goals like customer satisfaction or word-of-mouth referrals, they would have better avoided the bad behavior.)
4. Rewards focus on the wrong dependent variable.
They focus on the results of behavior, rather than the systems and processes that lead to success in the first place. Imagine rewarding a basketball team for winning games rather than the fundamentals of teamwork, communication, and physical training. The team might be motivated, but they lack the foundation to succeed.
5. Goals can limit performance.
Fixed goals like sales quotas suggest an upper limit. Once an employee reaches the goal, they have little reason to push harder. Instead, you want workers to keep improving and pushing past their limits.
6. Rewards are often administered inconsistently and unfairly.
Inequity is especially frustrating to employees. For managers, having to choose how and to whom to dispense rewards invites criticism of favoritism. Some people have an unfair advantage (like seniority) and take the rewards.
So why not use a % improvement metric, like rewarding people for the % improvement on their performance rather than an absolute improvement? This is demotivating to top performers, who are already squeezing out all they can, and % on their already high improvement can be hard. It also invites manipulation of sinking your sales numbers one quarter to get a big boost the next.
Often, reward program guidelines are unclear. If your company gives out an award for being a team player, what does being a team player actually mean? If you try your best one time to get a reward, but don’t get it because of unclear guidelines, then you’re going to stop that good behavior.
7. Rewards add stress for supervisors.
Managers already work hard. Now you add something else that risks politics and dividing the team to their plate.
8. Reward programs foster cheating.
The higher the stakes, the more you invite unethical behavior.
(Shortform note: recall again how Wells Fargo paid narrowly-focused bonuses for creating new accounts, leading employees to defraud bank customers.
9. Rewards destroy teamwork.
Limited rewards invite a zero-sum game approach. If your colleague wins, that means you lose. This promotes competition and undermines teamwork.
What about team based programs? This may work within a team, but it doesn’t reduce inter-team competition. Also, the top performers will feel annoyed at picking up the slack for underperforming colleagues.
10. Rewards cover up ineffective managers.
Effective supervisors don’t need programs to motivate their employees. If your employees are unmotivated, this is a management problem. Once you remove the rewards program, the bad managers will find it hard to get their teams to do anything.
11. Rewards programs often offer a weak reinforcement schedule.
Rewards in operant conditioning work best when they are tightly coupled in time to behavior. A good behavior rewarded immediately is established more firmly (think of giving your dog a treat immediately after he obeys a command).
However, most companies separate rewards far from the behavior, such as end-of-year bonuses. Even if it may reward work done in January of that year, it’s too far to solidify the behavior in the employee’s mind.
Furthermore, rewards work best when they’re given unexpectedly and have an unknown amount. If employees come to expect rewards, like a standard end-of-year bonus of 20% of their salary, this will cease to reinforce the behavior as strongly.
12. Giving gifts is not a reinforcement program.
Giving sudden gifts not conditional on behavior is not reinforcement. They don’t change behavior since they’re not tied to behavior.
13. Rewards reduce creativity and risk taking.
People tend to be risk averse, and if trying out a new strategy means losing out on a reward, they’ll stick to the tried and true.
14. Extrinsic rewards reduce intrinsic motivation.
Increased rewards diminish the perceived value of the task. The worker more thinks that she’s doing the work for the rewards, rather than for the work itself.
In the opposite direction, if the worker is paid little for the task, they tend to enjoy the task more (they must resolve the cognitive dissonance that they’re doing the work for such little pay, that they must love the work instead).
15. Rewards encourage the wrong behaviors.
Humans are endlessly creative at meeting incentives. Often you may find that you’re reinforcing unintended behaviors. For instance, rewarding top sales may encourage stealing of sales leads.
(Shortform note: A common antidote to this is use of countermetrics, like rewarding both efficiency and quality so neither comes at the expense of the other.)
16. In some programs, everybody’s a winner and gets rewards.
In some programs, everyone gets a similar sized bonus, regardless of how well they do. If the bar is set so low that everyone wins, then you draw everyone down to the lowest common denominator. Why work harder if your extra efforts are not valued?
17. Rewards programs can feel manipulative.
Your top employees are often motivated to do a good job as a moral quality. They want to do a good job for its own sake, and they feel manipulated when you dangle awards in front of them. The top performers also recognize that rewards are used to incentivize worse performers to do better, which is frustrating to high performers.
18. People who build rewards programs are generally not experts.
HR practitioners tend to be generalists and aren’t deep experts on workplace psychology. Thus it’s hard for them to determine the most effective workplace practices.
19. Rewards programs have no impact on workplace culture.
Culture is a set of communal values and expectations that are long-lasting. By virtue of being short-lived, programs do not improve culture.
20. Reward programs decrease overall motivation.
Who tends to win performance rewards? The top performers. Do they need more recognition and motivation to do well?
What does this do to the rest of the performers? It lowers performance – what’s the point of trying if you’re not going to get the reward?
Once again, engagement is an intrinsic, deep-rooted commitment to the job, organization, team, manager, and customer. Engaged employees work hard for the sake of the organization and because they feel fulfilled. Engagement buffers against short-term changes in motivation, like time pressure and equipment failures.
To picture the difference between engagement and motivation, imagine that a team is working to meet a deadline. An equipment failure makes it impossible to meet the goal. Do they keep soldiering on trying to achieve the most, or do they give up?
Engaged people do the first, motivated the second.
Engaged employees tend to do the following:
The benefits extend beyond the employee to the organization as well. Studies show that higher engagement associates with increased profitability, higher customer satisfaction, lower turnover, reduced fraud, and reduced absenteeism.
Unfortunately, studies of employers nationwide show that the majority of American workers are disengaged from their work. They don’t embody the desired qualities above. Clearly, more employers need to find ways to re-engage their employees with their work.
So you know that engagement is important. But how do you increase engagement?
Surveys of engaged employees show these factors improve engagement in the workplace:
In contrast, these factors lower engagement in the workplace:
Surprisingly, less than 2% of people mentioned money as a reason for disengagement!
Think about your current work situation and whether the environment increases engagement.
An engaged employee takes initiative, is excited to exceed goals, speaks with pride about where they work, and is committed to the organization. Do you consider yourself engaged? How can you tell?
What about the working environment makes you feel that way? If you’re engaged, what about the workplace stirs you to engage? If you’re not engaged, what is uninspiring about the workplace?
Employees who feel respect for the company and feel respected in return work harder to achieve the group’s goals. They tend to adopt a more giving stance rather than obsessing about personal gain. An effective leader has loyal followers who willingly do what is asked of them.
Respect can come from fear and intimidation, or it can come from sincerity and helpful motives. The latter is more sustainable and inspiring, so the book focuses on the latter.
Respect goes in 5 different directions:
We’ll explain each and how to develop respect in each direction.
Cultural values of ethics, hard work, fairness, and innovation all drive respect. When employees feel respect for the organization, they express pride at working for the organization.
Respect for the overall organization causes employees to work harder. Employees are less likely to burnout. And customers are more likely to trust the organization because of its values.
A practical strategy to develop respect is to give back to the community. A few useful suggestions for volunteer projects:
Another strategy is to publicize your organization’s relative strengths. This gives them pride in knowing there’s something special about the company.
Supervisors should be hard-working, competent, fair, and compassionate. Good supervisors advocate for the good of the team and don’t leave people behind.
Managers promoted from within tend to be respected because they’ve done the job of other employees before.
Supervisors who denigrate employees lose respect.
Employees will work harder for teammates they respect because they don’t want to let their team down. They openly communicate to one another to resolve problems – they respect each other too much to gossip behind their back.
Failing to hold underperforming team members responsible demotivates the entire team.
An easy way to increase respect in the team is to make commonalities clear, increasing empathy for each other. They can use personal background to understand future behaviors. One way to discover this is to circulate a team survey that asks personal questions. These can then be explored casually outside of work.
Questions to Build Rapport
A good first step to building rapport is to know more about the person. Here are questions that people can answer about themselves to share more about each other. This can be circulated as a questionnaire, or done live in a group:
Employees should feel challenged at the limit of their abilities. Completion of this challenging work creates a feeling of growth and accomplishment.
They should also feel that their work matters. It should be clear how their goals fit in with the organization’s larger goals, and how it contributes value to the end customer.
Employees feel better when singled out to take on a project – they feel particularly entrusted with a difficult task and are motivated not to fail, at risk of betraying the manager’s trust.
Finally, work should lead to opportunities for advancement and growth.
The less motivating work is, the more important it is for the manager to explain why the task is important. Even work that seems important to the manager can be undervalued by the employee, leading to poor performance.
If the worker does not believe that the organization has the worker’s best interests at heart, the worker will not reciprocate. This means covering all hygiene needs like salary and benefits and providing all other aspects of RESPECT model. The employee should feel as though the company does right by them.
Reflect on when you felt the most respect in each of the five directions.
When in your life did you feel the most respect for the organization you worked for?
When in your life did you feel the most respect for your supervisor?
When in your life did you feel the most respect for your team?
When in your life did you feel the most respect for the work you were doing?
We all desire social belonging and feeling like our efforts are important. Recognition from people, especially your managers, is a very direct way of achieving this. Marciano argues that the ROI of positive feedback is huge – a minute spent on complimenting work can lead to hours of increased productivity. Positive feedback is reinforcement that makes the behavior more likely to happen again, unprompted.
Managers tend to overestimate how much they give recognition and underestimate how important it is to employees. Imagine that some people keep a positive sticky note from their boss for months – it means that much to them.
Failure to reinforce through recognition actually suppresses behavior – if you assign a project and don’t reward hard work to meet its deadline, the worker is less likely to meet the deadline next time. If you admonish a worker for poor behavior, and the worker corrects it but doesn’t receive positive feedback, she’ll fall back to the bad behavior, for there is less reason to correct it. “You don’t get team members to take initiative by focusing on their lack of initiative.”
People tend to acclimate to repeated signals of one kind, and to notice deviations from the norm. If you only provide negative feedback, the next item of negative feedback gets little novel weight – if the worker tries her best but still gets only complaints, there’s little incentive to change. In contrast, a history of positive feedback will make a major complaint feel explosive and note-worthy. The employee won’t want to disappoint someone who’s signaled satisfaction through positive feedback.
Managers often cite reasons for not recognizing employees:
“Employees shouldn’t be thanked for doing what we pay them to do.”
“It’s not in my personality.”
“I have too many direct reports.”
“I don’t get recognized by my boss. So why should I recognize my reports?”
“They never do anything praiseworthy.”
Employees enjoy feeling autonomy, with the freedom to take risks and seek novel solutions. Autonomous employees are helpful because they’re more flexible in responding to novel situations and require less management overhead. They provide the change they want to see in the organization, which increases a feeling of ownership in the company’s success.
Autonomy requires trust from above, information sharing, sufficient resources, training, and decision-making responsibility.
Autonomous employees require information sharing to understand the goals of the organization. Only then can they independently make decisions that don’t detract from the team. (Shortform note: this echoes the concept of “Commander’s Intent,” where the high-level goals are defined specifically enough for the subordinate to know how his personal goals fit in, but vaguely enough to be agile and give the subordinate room to operate freely.) In contrast, keeping employees on need-to-know basis makes them feel untrusted and makes them resort to gossip.
Employees feel empowered when they have the resources to get their job done. They can only feel empowered when roadblocks and cumbersome processes are eliminated, or when they have authority to change them.
Training is one of the highest leverage activities to invest in. In onboarding, training helps develop existing skills in the context of the new organization. Ongoing training promotes an expectation of growth mindset, trust in their ability for growth, and increases engagement with assignments at their limit of challenge. Functionally, growth leads to additional value from the employee, and creates an internal pipeline of candidates for promotion.
Overall, employees who feel well-resourced and trusted believe the organization wants them to succeed.
Managers should provide feedback with the mindset of a coach: I want you to be successful. This viewpoint makes employees feel cared for and lowers defensiveness (compared to the situation if the manager were just berating the employee).
80% of feedback should be positive and reinforce behavior, while 20% should be about improving performance (constructive feedback).
Give feedback often. Lack of support signals to the employee that she doesn’t matter much and there’s no hope for her. This can set off a vicious cycle of disengagement and confirmation bias by the manager (“I knew Tim was no good -- look at how disengaged he is. I’m not going to waste time on him.”).
Good constructive feedback comes quickly after a problem begins. This wastes fewer resources from suffering the problem and makes it less awkward to point out (as opposed to giving feedback on a problem 6 months earlier).
If you give feedback often enough, performance reviews should not contain any surprises. Some managers give so little feedback, positive or constructive, that employees are left in the dark about how they’re doing. Then in end-of-year reviews, the manager shows up with a problem from 8 months ago. How does this feel fair to the employee?
Do not pile up all the bad news to unleash all at once. Would a coach wait until the season’s over to tell his team how much they could improve?
The author uses partnering to connote a relationship where parties are treated as equal partners, not as us-them or superior-subordinate.
By making your employees partners on a team, they think like business owners, and they act as stewards of the organization’s values. They can make decisions without waiting for approval. When working as partners on a team, people put the team’s goals before the self and use the best of their collective strengths while nullifying their weaknesses.
To foster this spirit, the manager should emphasize that no one wins unless everyone wins. Managers should also be willing to dive in and get their hands dirty.
Between departments, employees can partner to work on special projects. And outside of the company, organizations can partner with customers and vendors. If you engage all people like they’re on equal footing, giving them information and trust, they’ll enjoy working with you.
This should be obvious, but it often isn’t: by setting clear goals, you get the outcome you desire. If you don’t tell people what you want, how can you expect to get it?
A failure of an employee to perform is often a failure to communicate clear expectations with employees. As with positive feedback, managers often underestimate the clarity of goals they give to employees.
Employees don’t want to fail, and they don’t want to be yelled at. When’s the last time you purposely failed or felt good about failing? Don’t jump to this conclusion if an employee underperforms. Make sure that the goals you set were crystal clear.
Setting clear goals also allows you to evaluate people fairly. High-performing employees actually prefer clear goals, so their contributions can be distinguished from those of poor performers. “Just do your best” invites too much vagueness.
New employees need clear expectations to give them confidence they’re on the right track – think pointing a ship leaving port in the right direction. You might even make expectations clear during the interview process – what the hours are like, how they’ll be evaluated, what resources they’ll have. Doing otherwise invites dissatisfaction once they come onboard.
Goals should be:
In the other direction, make sure you clearly understand your subordinates’ expectations.
Setting Goals
Managing Goals
Consideration is giving careful thought to a person. Acknowledging that the person is human and not just a cog develops loyalty, not just in the recipient but also in teammates who witness considerate behavior. This inspires people to show up for work other than to receive a paycheck.
In contrast, acts of selfishness by the company promote tit for tat behavior. The employee has little faith the company cares. If the company doesn’t care about the employee, why should the employee care about the company?
Building a personal connection with employees is important to pave the way for consideration opportunities. The more connected an employee feels to her supervisor, the more she’ll open about personal issues, which will create opportunities for consideration by the supervisor. This creates a virtuous cycle.
Trust is confidence in a person and absence of questioning of the person’s motives.
Trust engenders engagement by giving the employee more ownership over her work and not wanting to let the supervisor down. Trusted employees feel more comfortable pitching risky ideas, and they’re more receptive to change as they believe the employer has the employees’ best interests at heart.
In a culture of distrust, ideas are not shared for fear of others exploiting or disparaging them. Motives are constantly questioned – “what is this person up to now?” Untrusting people assume the worst. It crowds out productive thinking.
Some people start out trusting by default, but for others, trust takes years to build. A single mistrustful step can shatter trust like pottery.
Conclusion
Leaders earn RESPECT by practicing it everyday. Leaders tend to overestimate how much respect they give, especially since they rarely receive direct feedback about their interpersonal problems.
If you have a problem, the first step is to be aware of the problem and admit that it exists.